Dear All,
Interest to be paid on supplementary invoice for rate difference is known. but if supplementary invoice prepared for volume base transaction then also 'is it payable?'
e.g. If our customer gives me assurance for 50000 parts will be purchased every year and quotation of ₹ 10 given by us as per his assurance and a clause is mentioned in agreement that if he fails purchase less than 50000 qty. (say 40000) then the rate will be ₹ 12. and differential amount will be collected by issuing supplementary invoice, and further dispatch will continue by old rate i.e. ₹ 10. PLS GUIDE 'IS INTEREST TO BE PAID ON SUCH TRANSACTIONS? ' if yes then 'WHY'
Regards,
Santosh
Interest on Supplementary Invoices: Unresolved Issue After Conflicting Supreme Court Cases on Section 11AB Interpretation A forum participant inquired about the necessity of paying interest on supplementary invoices for volume-based transactions. The scenario involved a customer agreeing to purchase a certain quantity annually, with a price adjustment clause if the quantity was not met. The response highlighted a Supreme Court case, COMMISSIONER OF CENTRAL EXCISE, PUNE vs. SKF INDIA LTD., which held that differential duty on supplementary invoices attracts interest under Section 11AB of the Act. However, this decision was later disapproved in a subsequent Supreme Court case involving STEEL AUTHORITY OF INDIA LTD., leaving the issue unresolved. (AI Summary)
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